General Motors has increased several financial forecasts for 2024 after exceeding Wall Street projections for its second quarter performance.
The company now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, raised from the previous estimate of $12.5 billion to $14.5 billion. GM has also adjusted its targets for operating cash flow and earnings per share. However, it slightly reduced the expectations for net income attributable to shareholders, bringing it down to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion. Earnings per share reached $3.06, exceeding the $2.71 anticipated by analysts and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these positive results, GM’s stock rose nearly 5% in pre-market trading, with gains of over 37% recorded this year. The company declared a cash dividend for the third quarter after market close on Monday, contributing to the stock’s momentum.
In a communication to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs. She mentioned that the company is set to unveil eight new or redesigned compact, mid-size, and full-size models in North America. Additionally, she discussed the ramp-up in production for the electric Chevrolet Equinox, emphasizing GM’s commitment to “disciplined volume growth” despite earlier comments indicating that the goal of producing 1 million electric vehicles in North America by the end of 2025 would not be met due to market conditions.
Barra also addressed the self-driving division, Cruise, which recently had to roll back its operations following an incident last October. She announced that Cruise would discontinue the Origin vehicle and instead utilize the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona, as GM incurred a $600 million charge linked to the production halt of the Origin.
During a call with analysts, Barra explained that shifting to the Bolt would help ease regulatory concerns regarding the unique design of the Origin, which did not have a steering wheel. This change aims to reduce per-unit costs and improve resource optimization.
“Our vision to transform mobility using autonomous technology remains steadfast, and every mile traveled brings us closer because Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, as it continues to face financial losses, having recorded a $104 million loss for the second quarter. Production cuts at SAIC-GM were noted in June, with a reported delivery of 26,000 vehicles, representing a 50% decrease compared to the previous year, according to Automotive News.